Can’t have a Christmas party this year? Give a gift instead!

I don’t think any of us were prepared back in March when the government announced our first lockdown that by the end of November, we’d still be in the midst of Lockdown 2.0! Whilst every year brings its challenges, it goes without saying that 2020 has been exceptionally tough on not just the partners; but all the staff working within your practices.

Regardless of how big or small it usually is, the annual staff Christmas party is always one of the highlights and it’s looking less and less likely you will be able to have one this year and although it’s normally a day or night of fun; the underlying message is always a celebration and a thank you to your team for all the hard work during the year.

In an attempt not to demotivate during this difficult year, there are other ways of celebrating and thanking your staff.

Virtual Party

You could host an online party using Zoom or Teams (perhaps a quiz if people aren’t quizzed out from the first lockdown!); there are online silent discos, online escape rooms, online murder mystery parties – a quick google of “Lockdown parties” could generate something fun for you team.

As a reminder, the annual function is tax allowable as long as the cost is below £150 per head. This could cover the cost of the “online” party and any food or drink provided to the staff.

Gifts

HMRC defines gifts below £50 as a “trivial benefit” and as long as this gift isn’t achievement related (i.e. it isn’t a bonus but a genuine gift) then the tax man is happy for you to treat your staff in this way.

This could be a voucher (the voucher should not be able to be exchanged for cash) such as Amazon, M&S or John Lewis. These are great because these vouchers can be used online in most cases which means even those unable to hit the shops over the holidays will be able to use it.

You can also give physical gifts such as books, food, wine, hampers, homeware, cuddly toys – the options are endless but the total value of the gift should be less than £50.

The tax man is fairly flexible with these gifts and we see no reason why multiple trivial benefits can’t be given during the year to celebrate holidays, birthdays, new arrivals and any other reason to celebrate your staff (without it being directly linked to their performance at work).

If you exceed £50 on these gifts, they will need to be declared to HMRC via a P11D and employees and employer’s national insurance will be charged.

If you want to give monetary bonus this must go through the payroll. This will be subject to tax and national insurance. You cannot give cash as a gift to your staff.